Phase 3 - Contract

3.9 Develop a governance structure and board

Whether or not an SPV is set up, you will need to develop a governance structure and board that will empower you to change tack, make difficult decisions, or add additional resources if necessary.

Makeup of the board:

Consider, if your board does not include a representative from all your investors and partners, what will be the role of those not on the board? How can you best leverage the expertise of all the partners to best support the work? This may involve setting up other committees or advisory groups.

The impulse to receive as much support as possible and make all your stakeholders feel involved must be balanced against the time commitment needed to service these bodies. A neglected committee or group can either become a burden on staff or spoil the goodwill of your partners.

Governance best practices:

Here are some best practices that should help to establish a structure that best supports your work and ensures that the process will run smoothly.

  1. Very clear governance and decision-making responsibilities, especially if more than one governance entity

For example, operational meetings with commissioners, commissioner contract review meetings, SPV board meetings

Responsibilities should be laid out in Terms of Reference and may include:

  • Performance management
  • Selecting service providers
  • Hiring/replacing staff
  • Managing any renewal/novation/alteration/breach of contracts:
    • Contracts with outcomes-payers
    • Loan agreements with investors
    • Service provision contracts with delivery partners
  1. Frequent (monthly or quarterly) board meetings of the SPV or SFI, during which:
  • The service provider reports progress on the outcome indicators and other operational KPIs regarding performance. For example, whilst not necessarily directly linked to outcome payments the number of participants enrolled on a programme can affect success and should be monitored
  • Management accounts for the SIB project or SPV are presented
  • The board asks questions concerning progress and any challenges on targets
  • Often, safeguarding issues and complaints are given a regular slot for reporting to the board
  1. Composition of the board to best support the project
  • An investor actively involved in all board meetings
  • A stakeholder who deeply understands the policy area
  • A stakeholder who is close to the commissioner and who understands the local context and commissioning environment

It is best practice to define a quorum and voting mechanism up front. For example, on a board of six members, three may be quorate and the Chair may have the casting vote.

  1. Agendas for board meetings that clearly communicates data and raises red flags regarding any performance or other issue


Sample Board Agenda
Contributed by ThinkForward

Download Tool

Demonstrates a mix of standing and one-off items

  1. Well-defined roles and responsibilities for board members, as well as well-defined structures and processes to be used by the board. Arrive at the first meeting of any board or committee with draft Terms of Reference as a starting point.


Next: Phase 3 checklist